Panorama Foundation, Mumbai vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. No. 7233/Mum/2011 (AY:2006-2007) ADIT (E)-II(1), फनाभ/ M/s. Panorama Foundation, R.No.507, Piramal Chambers, 1 s t Floor, Sunbeam Vs. Lalbaug, Parel, Mumbai-12. Apartments, Rajaram Maharani Marg, Charni Road, Mumbai - 400 004. स्थामी रेखा सं ./ PAN : AAATP8777H (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent)

C.O. No.248/M/2012 (Arising out of I.T.A. No. 7233/Mum/2011) (AY:2006-2007) M/s. Panorama Foundation, फनाभ/ ADIT (E)-II(1), st 1 Floor, Sunbeam Apartments, R.No.507, Piramal Chambers, Vs. Rajaram Maharani Marg, Charni Lalbaug, Parel, Mumbai -12. Road,Mumbai - 400 004. स्थामी रेखा सं ./ PAN : AAATP8777H (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent)

अऩीराथी की ओय से / Assessee by : Shri Vijay Mehta, AR

प्रत्मथी की ओय से/ Respondent by : Shri Deepkant Prasad

सुनवाई की तायीख / Date of Hearing : 15.07.2015 घोषणा की तायीख /Date of Pronouncement :29.07.2015 आदे श / O R D E R

PER D. KARUNAKARA RAO, AM:

There are two appeals under consideration involving the assessment year 2006-2007. The captioned appeal is filed by the Revenue and the Cross Objection is filed by the assessee against the order of the CIT (A)-1, Mumbai dated 19.8.2011. since, the issues raised in both these appeals are connected, therefore, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise adjudication is given in the following paragraphs of this order.

2 C.O. No.248/M/2012 (AY: 2006-2007) (By assessee)

2. Firstly, we shall take up the cross objection raised by the assessee. In this cross objection, assessee raised the following cross objections which read as under:

"The Ld CIT (A) has erred in law and on facts in not holding that the order passed by the Assessing Officer u/s 153C r.w.s. 153D of the Income Tax Act, 1961 was illegal, invalid and bad in law. The Ld CIT (A) ought to have set aside the order of the Assessing Officer as it was not passed in accordance with law."

3. At the outset, Ld Counsel for the assessee mentioned that there is a delay of 69 days in filing the appeal before the Tribunal within the prescribed period. In this regard, Ld Counsel for the assessee brought our attention to the affidavits filed by Shri Viral Doshi, a Chartered Accountant who is looks after the tax matters of the assessee as well as the affidavit of Mr. Kamal Matalia, Trustee of M/s. Panorama Foundation and mentioned that the delay in filing the appeal is not a deliberate act and the assessee was restrained by a sufficient cause for not filing the appeal before the Tribunal within the prescribed time limit. Ld Counsel for the assessee read out the contents of the said affidavits and the same read as under:

3.1. Relevant portions of Mr. Viral Doshi‟s affidavit are:

"1.......

2. I state that the Form No.36 and grounds of appeal filed by the Revenue for AY 2006- 07 in the case of Panorama Foundation were forwarded to me in the second week of August 2012 for my study and advice; and upon perusal I found that it was a good case for filing cross objections for which they were retained for taking up a litter later. I further state that the aforesaid papers received in my office unfortunately got mixed up with some other papers and, therefore, could not be attended to as per the planning.

3. I state that in the month of September, 2012 and thereafter I was busy in the time bound audit and works relating to Income Tax returns, finalization of quarterly results of certain limited companies etc. I further state that the unintentional mistake was noticed in the 2nd week of November, 2012 when the cross objections of Panorama Foundation were prepared immediately and sent for signatures of the Trustee. I say that, therefore, the delay of 69 days in filing the captioned cross objections was not due to any negligence or lapse on the part of the Trust but due to the facts mentioned above.

4. ........"

3.2. Further, assessee also relied on the following decisions to condone the delay in filing the captioned cross objection and to admit the same for adjudication on merits.

1. Collector, Land Acquisition vs. Mst. Katiji & Ors (167 ITR 471);

3 2. N. Balakrishnan vs. M. Ramamurthy [1998] 7 SCC 123;

3. Sonerao Sadashivrao Patil & Anr. Vs. Godawaribai [1999] (2) Mh. L.J. 273; and

4. Venkatadri Traders Ltd vs. CIT [248 ITR 681 (Mad.)]"

4. We have heard the Ld Counsel for the assessee and the Ld DR for the Revenue on this issue of condonation of delay. After considering the above submissions of the assessee and the contents of the affidavits of Shri Viral Doshi as well as Mr. Kamala Matalia and also the precedents relied on by the assessee, we are of the opinion that the „reason‟ for delay of 69 days in filing the cross objection before the Tribunal is not attributable to the assessee, and there is a „sufficient cause‟ that restrained the assessee in not filing the cross objection within the stipulated time. Considering the ratio laid down in the aforesaid precedents which is relevant for the proposition that "the rules of limitation are not made to harm the valuable rights of the parties", as well as considering the "sufficient cause" for delay in the instant cross objection, we are of the opinion that this is a fit a to condone the delay. Accordingly, we condone the delay of 69 days and proceed to adjudicate the cross objection on merits.

5. In connection with the above mentioned cross objections, Ld Counsel for the assessee narrated the brief facts of the case and the chronology of the events and the same reads as under:

SlNo Date Event 1 10.8.2006 Search conducted on Akruti Nirman Limited and other group entities 2. 30.12.2008 Assessment in case of Akruti Nirman Ltd and other entities completed

u/s 153A of the Act (Limitation period for passing the assessment order u/s 153A expired on 31.12.2008)

3. 11.9.2009 Assessing Officer of searched person sent information to the assessing officer of appellant.

4. 18.12.2009 Notice issued u/s 153C of the Act

6. From the above Ld Counsel for the assessee demonstrated that there is a gap of 9 months ie from 30.12.2008, the date of making assessment u/s 153A of the Act in the case actually covered by the search u/s 132 of the Act, to 11.9.2009, the date of making satisfaction to forward the relevant information to the Assessing Officer of the assessee, who is covered u/s 153C of the Act. Demonstrating the above events, Ld Counsel for the assessee mentioned that the said delay of 9 months cannot be considered as "immediately" after making the assessment u/s 153A of the Act. Ld Counsel for the assessee submitted that such assessments are invalid. For this, he 4

relied on the Apex Court judgment in the case of CIT vs. Calcuta Knitwears [2014] 362 ITR 673 (SC), which is relevant for the following proposition:

"..........The satisfaction note could be prepared at either of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; (b) along with the assessment proceedings under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person."

7. Relying on the above proposition laid down by the Hon‟ble Supreme Court as well as the aforesaid „chronology of events‟, Ld Counsel for the assessee submitted that the notice u/s 153C was not issued to the assessee immediately after completion of assessment u/s 153A of the Act and hence, the proceedings u/s 153C of the Act are bad in law.

8. After hearing the Ld DR, we are of the considered opinion that the ratio laid down by the Apex Court is squarely applicable to the case of the assessee. This is not the case where proceedings u/s 153C of the Act is initiated „immediately‟. The said ratio, in our opinion, applies to the provisions u/s 153C of the Act. The delay of 9 months cannot be considered „immediately‟. Therefore, in our view, this is not a fit case to initiate proceedings u/s 153C of the Act and we quash the assessment made u/s 153C r.w.s 153D of the Act. Accordingly, cross objections raised by the assessee are allowed.

9. In the result, cross objection filed by the assessee is allowed.

ITA NO.7233/M/2011 (AY 2006-2007) (Revenue's Appeal)

10. Now, we can take up the Revenue‟s appeal. The issue relating to the validity of the assessment raised in cross objection is decided in favour of the assessee. Therefore, the adjudication of the Revenue‟s appeal becomes academic. Accordingly, the grounds raised by the Revenue in the instant appeal are dismissed as infructuous.

11. In the result, appeal of the Revenue is dismissed and the Cross Objection of the assessee is allowed.

Order pronounced in the open court on 29th July, 2015.

Sd/- Sd/- (AMIT SHUKLA) (D. KARUNAKRA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 29.7.2015 व.नन.स./ OKK , Sr. PS 5

आदे श की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to :

1. अऩीराथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमुक्त(अऩीर) / The CIT(A)-

4. आमकय आमक् ु त / CIT

5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भंफ ु ई / DR, ITAT, Mumbai

6. गार्ड पाईर / Guard file.

सत्मावऩत प्रनत //True Copy// आदे शानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, भुंफई / ITAT, Mumbai